Identity Theft and You

Wednesday, March 30, 2011 By Mike Reddy

Of all the things one can lose, your identity doesn't sound as traumatic as being mugged for your wallet. The truth is that identity theft can be extremely expensive and inconvenient, and could impact not just yourself but your family and your firm.

The definition of identity theft is quite broad. The most common is when someone takes your credit card details and starts signing purchases in your name. Few store assistants bother to check signatures these days and many card issuers are moving to PIN numbers as a result.

A minor form of identity theft is stealing access to your email account and contacting your friends and colleagues in your name. This can have embarrassing consequences to the receivers or to a wider audience if the thief posts comments on popular forums or blogs where you are well known. It can be difficult to patch up a reputation that has been sullied in this way.

Another, greater risk is of a thief contacting business partners to ask for confidential information or forwarding them internal emails.

But it's the little pieces of information - where you went to school, your mother’s maiden name, the street in which you first lived - that in sum can give a thief enough of a profile to assume the identity of someone else, which gives them a disturbing amount of power. In the worst cases, someone with enough points of identification can take bank loans or mortgages in your name.

Banks have processes in place to deal with this type of fraud however it can take victims weeks to untangle themselves. In the meantime a temporary loss of funds can make it difficult or impossible to pay bills and the debacle can consume many working hours to sort out.

Simple steps to protect against identity theft include limiting the amount of information you post on social networking sites such as Facebook. This can be difficult when friends post birthday wishes, but not revealing the year will make it one step harder.

Physical mailboxes are often targets for identity thieves who have used master keys to clear out all mail from a block of apartments. Often they are targeting letters from your bank that contain account numbers, full names and addresses. Combined with facts like the school you went to and your favourite hobbies a thief can try talking their way past a bank call centre to transfer money from your account.

Security post office boxes at your local post office are a safer choice for receiving mail. Even better is to cancel the mail and opt for email notifications and electronic bank statements instead.

Safeguarding your email account requires a long and complex password that is unique to that that account. Don't use your Facebook password for your email and your online banking.

Mike Reddy is a Chartered Accountant, business coach and advisor helping businesses in Sydney, Melbourne, Brisbane and Gold Coast to easily increase their profits and cash flow. He is currently President of the North Sydney Chamber of Commerce, a Regional Councillor for Sydney North East and a member of the Institute of Chartered Accountants Sydney leadership team. As well as advising businesses, Mike presents business development seminars and webinars and is regularly contacted by the media to comment on small business matters. You can connect with him on Facebook, Twitter and Google+.